Zilliqa Publishes New Improvement Proposal (ZIP-21), Aimed At Enhancing Interoperability Between Fungible Token Contracts on Scilla and EVM

Key highlights:

• Zilliqa recently released an improvement proposal to make it easier for developers
• They call it ZIP-21, and it aims to make tokens created on Zilliqa’s Scilla smart contracts more compatible with Ethereum’s EVM contracts.
•  This means developers can finally transfer tokens between Scilla and EVM contracts seamlessly, opening up Zilliqa’s network.

Zilliqa, the high-throughput public blockchain platform, recently published ZIP-21, a new Zilliqa Improvement Proposal that aims to enhance interoperability between fungible token contracts on its two smart contract platforms- Scilla and Ethereum Virtual Machine (EVM).

This development was announced by Zilliqa with the below tweet and elaborated further in a blog post.

ZIP-21 has just been published, detailing how Zilliqa #EVM can invoke fungible token contracts written in Scilla!

This means that ZRC-2 tokens can now appear as ERC-20 tokens to other contracts, bringing improved interoperability to the #Zilliqa EVM network.

Find out more about… pic.twitter.com/r0Brw01Ayx

— Zilliqa (@zilliqa) August 3, 2023

Background

Zilliqa implemented EVM compatibility earlier this year, allowing developers to write and deploy smart contracts in Solidity. However, this did not allow EVM contracts to call Scilla contracts and vice versa.

ZIP-21 introduces a mechanism that enables ZRC-2 tokens (fungible token standard for Scilla contracts) to appear as ERC-20 tokens (fungible token standard for EVM contracts) in other contracts.

This improved interoperability is a key step in enhancing cross-chain interactions on Zilliqa.

Details of ZIP-21

Specifically, ZIP-21 outlines:

• How EVM can now invoke a Scilla contract transition to transfer ZRC-2 tokens
• How EVM can read data from a Scilla contract to reflect ZRC-2 token balances

This is implemented through two new precompiles – one that lets the EVM invoke a Scilla transition and another that allows the EVM to read Scilla contract data.

Significance

This development has two major significances:

1. Seamless transfer of tokens between EVM and Scilla

The fungible token interoperability introduced in ZIP-21 allows developers to transfer tokens seamlessly between EVM and Scilla contracts.

For example, a Solidity smart contract on Zilliqa EVM can now transfer ZRC-2 tokens issued on Scilla, while seeing them as ERC-20 tokens. This was not possible previously.

2. Enhanced interoperability and accessibility

By enabling EVM contracts to invoke Scilla contracts, ZIP-21 greatly improves interoperability between the two smart contract platforms on Zilliqa.

It also makes the Zilliqa network more accessible to external applications, especially Ethereum-based apps that want to leverage the high throughput and low fees of Zilliqa.

The road ahead

The Zilliqa team mentions that this is the first phase of Scilla-EVM interoperability on their platform.

Future implementations will introduce the ability for Scilla contracts to call EVM token contracts, along with enabling interoperability between NFT contracts on both platforms.

These continuing improvements to EVM compatibility and cross-chain interactions underscore Zilliqa’s focus on leveraging the best of both worlds – the safety and security of Scilla along with the vast ecosystem of EVM-compatible chains.

Zilliqa’s current price of $0.0203 is down by-0.4% in the last 24 hours. It’s market capitalization of $325 million places it in the 100 largest cryptocurrencies by market cap.

It marks an important milestone for Zilliqa in its roadmap to become an interoperable hub for enterprises and decentralized applications. With recent upgrades like EVM integration, the launching of ZilSwap, and now ZIP-21, Zilliqa is strengthening its proposition of being a scalable and cost-efficient Layer 1 blockchain solution.